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20100131
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on the nation's budget deficit. our chief washington correspondent john harwood has the details. john, so take us through it. the deficit numbers are really shocking. >> well, they're shocking. they're slightly less shocking than they were before the omb came up with this number. we have a $1.3 trillion deficit forecast for 2010. a little over 9% of gdp that is smaller than the 1.4 trillion last year in the earlier omb estimate and the key word for the obama administration today is freeze. the president's aides put out the word in an embargo briefing that the president would propose a three-year freeze on domestic discretionary program that did not inrovolve security. not the home lann security department. this would affect 17% of the federal budget. a very limited scope and it would save $250 billion over ten years. just $10 billion or $15 billion is the difficult balancing act. the president will also talk about in the state of the union about the bipartisan commission that's been talked about on capitol hill, but at the same time he's pushing new jobs, legislation and that's going to be a f
in baltimore. cnbc chief washington correspondent john harwood, give us the lowdown, john. >> reporter: dennis, the president's trying to follow through on the outreach to republicans he had in the state of the union address. now, i think in all candor, we have to say that neither side expects very much to come from this. because there's big philosophic disagreements. the president did not get support from republicans on the stimulus plan. he's got a big ambitious agenda. here's one reason why the president has a strong hand, though, in that discussion as an individual leader. look at this -- these numbers from the new nbc wall street journal poll about who the public holds responsible for the lack of action in washington. 27% say president obama, 41% say congressional democrats, but most of all, 48% say congressional republicans. now -- >> that's more than 100%, doesn't it? >> reporter: no, no, that's -- each person is asked to give an assessment, and it's not -- no, it's not supposed to total up to 100%. >> let's listen in to the president. >> thank you so much. thank you. thank you. thank y
they are putting their plans together -- >> so washington is also a problem? >> absolutely. you know, the city union address, it doesn't say a lot to -- for our country that we are hitting a reset button. >> but jj, the last time you were on, you were advocating basically a more safe portfolio. >> absolutely. >> you have now not committed, as i understand it commitments to equity test, raised cash levels, shorten up maturities? what should the individual investors be doing in this market environment? >> the investor should look for, as best as he possibly can, to maintain income coming in for himself, especially the baby boomers retired, very high credit quality, he is going to take a hit on some of those yields by getting out of the long-termer corporates, shortening up, getting higher quality, taking his high-yield portfolio, shortening it up, getting bang for the dollar. >> interested in spreefring your capital rather than reaching for yield? >> absolutely. and even in the equity side of the portfolios we are in, we are looking at long/short investing. the exposure to stocks but volatility
in a bit. >>> i'm john harwood on capitol hill in washington. everybody knows democrats for trouble. i sat down today with a house democratic leader denny hoyer. he said they need to see through obama's agenda and turn the long-term deficit reduction and you want the wealth toe participate. >> i'm julia boorstin at the consumer electronics show in las vegas. i'll talk to the ceo of tivo about his game-changing technology about the winners and losers at ces. >> the market's getting more clues that job losses are easing with the labor department report. the number of people claiming unemployment benefits for the first time rose slightly last week, but the rise was less than expected. this after two weeks of sharp drops. initial claims for jobless benefits rose by 1,000 to 434,000, lower than the 447,000 that analyst his expected. >> let's get to the market action. stocks paring some of their losses. consumer discretionary shares are on the rise. boeing, mcdonald's among the leaders. brian shactman is at the new york stock exchange for us. brian? >> interesting. jobless claims and a mixture o
to washington to do. so there are a lot of politics involved here, of course, but there's a lot of policy as well. they're saying what we're doing is trying to separate out some of these risky activities that helped to cause the financial armageddon in the first place, and also because we're seeing some of these banks taking advantage of this safety net, they call it, to make propretear trades and huge profits. >> john, can they be done just with the s.e.c. and fdic bureaucracy, or does it have to be done with congressional thor asian some. >> what's been moving through the house has permissive regulation, saying regulators can take extents to limit risk. what the administration is doing is saying, whether or not it's feld out in the financial regulation legislation, which has not moved through the senate yet, here's how we're going to use that authority and here's how we're going to reg lay. i agree with eamon on the politics, and that politics has all the more reason for the administration to push because of the massachusetts results. on the other hand, paul volcker has been the head of
right now is the out-of-control spending that they're seeing take place in washington, d.c. they are sick and tired and they are fed up with this. they know that this is a continuation of the big government stimulus and the big government bailout program that they have seen take the congress over the past couple of years in washington and they have had it. >> do you not think, though, congresswoman that wall street is tone deaf in this environment to be giving out bonuses that, in some cases, have topped bonuses before the financial crisis. i mean, a number of private hedge funds have eliminated bonuses completely and deferred compensation because they feel that the environment is not correct to be giving out large bonuses. >> you are right about that. you're right about that. >> doesn't the president have a point? >> wall street is a little bit tone deaf, but what the president is doing is making statements that are really counterproductive to what he is going to do, what he is trying to do with the economy. you know, they're talking about a few banks and now we're alrea
. the polls are open, stakes are high for wall street, washington, and the power of the president. the breakdown of what a republican win in massachusetts could mean for health care and the balance of power on capitol hill. >>> a "power lunch" exclusive, with a four-star global fund manager whose fund is up 35% in the past year. >>> plus -- are men marrying wealthier? a new report today showing that men are reaping more economic benefits in marriage than women are. analysis of saying i do coming up in the second hour of "power lunch." it starts right now. >>> welcome to the second hour of "power lunch." i'm tyler mathisen with sue herera, dennis kneale, julia boorstin. news on housing. let's go to diana olick in washington. diana? >> reporter: tyler, that's right, home builds are sentiment slipped for the second month in a row. national association of home builders survey slipped to 15, down 1 point in january. the dividing line between positive and negative is 50. regionally, declined everywhere, falling one point in the northeast, midwest, south, dropping three points out west.
of keefe, bruyette & woodses, washington research analyst to join us in the conversation. brian, welcome. let's talk first about bernanke. i cannot recall another fed reconfirmation that has come anywhere close -- not even volker, that has come anywhere close to what looks like crumbling support on a broad scale. >> when bernanke had his con filmation hearing in the senate banking committee in december, we said this could be a lot tighter than we originally thought and curious if aig would carry out over the month and the support never firmed up, and i think the senate vote in massachusetts has democratic -- democrats very anxious. they're scrambling and you're starting to see a number of democrats, as steve mentioned coming out publicly opposing him. another democrat that steve did mention, sherry brown from it ohio who voted for bernanke on the committee and i still think he probably will, but he hasn't come out and said publicly that he'll vote for him on the floor. so you start to see the earth's starting to shift a little bit. >> so, steve, what is gained if mr. bern archingy is not
'll take it from washington, there, david faber with jamie dimon. we will continue our coverage and discussion of this remarkable day on capitol hill where the financial crisis inquiry commission heldst first of several hearings and we're going to continue that conversation with our panel right after this break. >>> welcome back. the market itself is up 50 point on the dow jones industrial average and one of the win sers j.p. morgan case. you just heard first here on cnbc from jamie dimon, the head of j.p. morgan and the stock is up 2%, 87 cents to 44.36 and he was interviewed moments ago by our david faber and our esteemed panel which david is now part of is rejoining us and i promised david cotock i'll get to you in just a moment. david faber, i found mr. dimon's comments very interesting, one that they have actually used the clawback measure. we haven't heard any of the bankers yet mention the fact that they have done that. >> you know, sue, we're going to sit down, mr. angelides who is running this commission, if that's okay. >> yes. >> can we do that? >> sure. i'll get back
extra hot mocha. why? >> i'm diana olick in washington. it will get harder for some borrowers to get a low down payment loan, but fha officials say they have to make the changes to shore up the balance sheet. we'll explain. >>> let's get to the market action. the dow havingst biggest drop since late october now down over 190 points. energy stocks among the losies, as oil plunges, financials among the winners. bob pisani kicks it off at the new york stock exchange. >> good afternoon. the important thing is it's all about china believe it or not, not about the massachusetts election. chinese authorities tightening lending standards and telling banks not to lend during the month of january. china's the global engine of growth and the material stocks are hurting. take a look at some of the big commodity names that are out there. >> it's still under pressure. and rio tinto and the gold stocks like newmont are all under pressure here. the dollar's strong and industrial stocks, most of them are down 2% to 6% and the transports like ryder and csx. they had a fairly mediocre report and
.a.r.p. money to weather the financial crisis it's predictably angering many on wall street and washington. wall street compensation was excessive am mri feig the risk taken by these firms, but he also noted how j.p. morgan structures its compensation plan in line with recommendations about pay that's been made by regulators including the federal reserve. dimon saying we do not have change of control agreements, special executive retirement plans and golden parachute, special severance packages or merger bonuses. like rivals morgan stanley and goldman sachs, j.p. morgan repaid the t.a.r.p. money with interest back in may. the t.a.r.p. money had become like a scarlett letter. these days bonuses are the scarst letter. profit ashlable banks arguing payout is justified and those want profitable maintaining they need it to retain talent. the fdic considering charging banks with compensation charges deemed too risky higher premiums for deposit insurance. >> that presumes that the fdic would recognize risk, right? they would say, okay, this practice is risky so therefore we're going to do something to
. twice you beat -- by twice the market last year. washington, there's some tax threats for hedge funds and there's regulatory threats for hedge funds. what's their future, in your judgment? >> i think the future is we will probably have the politicians try to regulate us more. reality is we have plenty of regulation already. for example -- i'm not different than most hedge funds. regulated by the scc, federal reserve board regarding requirements, subject by in-house clearing brokers, maintenance margin requirements, a partnership agreement which represents my investment programs to my investors. if i deviate the program i could be litigated about. most importantly, i think the -- most of the hedge funds -- they are zealous of their reputation and don't want to do anything stupid. we have plenty of regulation. regulation was in place to catch madoff but were lax. >> better enforcement. >> better enforce many. it is rules are there. hedge funds aren't the problem. the problem is the lack of vision and gumpion on the part of the regulators. what's the energy policy? "the wall street journ
there were those among us involved in this in each of the institutions involved, washington, new york treasury, who were deeply troubled by that choice were not comfortable with this. >> you thought it was what you had to do at the time. >> i believe so, yes. >> it was so important as you said in your written and your testimony here this morning, your oral testimony, that this was critical to american families and american businesses. >> i believe that. >> it begs the obvious question. why the secrecy relative to disclosure? if it's that important $62 billion, why in the heck not disclose it when it's happening since you've subsequently done that, why the secrecy and frankly, why weren't you -- if it's that critical, if it's that important, why the heck did you recuse yourself? why weren't you involved? >> again, just to step back a sec, when the fed disclosed this in 2009 i thought it was the right thing to do, and i think reasonable people looking back at this would say why wasn't it possible sooner. >> why wasn't it possible in november when it was all going down? >> right. all i c
money on timing. tyler, back to you. >> thank you very much. it was bank bashing week in washington. tuesday the fdic spoke about taxes banks. wednesday, the ceos of goldman sachs, j.p. morgan, bank of america, morgan stanley and among others grilled by lawmakers over their role in the financial crisis. thursday president obama unveiling a plan to recoup taxpayer bailout money by slapping big banks with a so-called t.a.r.p. tax. listen to the three power players leading the assault on wall street this week. >> this financial crisis has led to tremendous losses. we estimate $100 billion in losses for the deposit insurance fund over the five-year period. the industry has to pay for that. >> it sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars. it doesn't seem to me that that's a practice that inspires confidence in the markets. >> my commitment is to the taxpayer. my commitment is to recover every single dime the american people are owed and my determination to achieve this goal is only heightened when i see
-week highs. the railroads, shippers and energy names are all on that list. ty? >> washington, possibly cracking down on wealth in the new year targeting it very directly. one of the issues when the senate reconvenes is raising tackes on what's known as carried interest, something that could more than double the taxes on private equity and hedge fund managers and on certain things like real estate-limited partnerships. is it the right move? it certainly sounds irresistible probably to politicians and pop lefts. daryl jones is professor at florida a&m university and robert stewart is vice president for public affairs at the public equity council. mr. jones, let me start with you. i assume you see, for example, that 20% profit participation that hedge fund managers and certain private equity people get or pull out of this thing as fees, want as a slice of profits. explain to me why you see it that way when so many other countries do not. >> well, first of all, i think that the premise of your question is -- might be wrong. i think most other countries are facing this issue. that is they'r
washington correspondent john harwood. chief political strategist at potomac research group, cnbc contributor. john, what are you hearing this morning in terms of vote counts? >> senior white house official will be confirmed comfortably. guess being half the republican caucus and it is going to vote 20 votes for this. will be in the low 60s. >> greg, what's that mean if that comes in the low 60s meaning 40 votes? >> well, that's the point. i think they have been weakened and they have to say the blood lust from the populist for a human sacrifice will persist. i think that they are still out for geithner. we get bernanke, it would have been unthinkable and unforgivable if congress had not approved bernanke. i think that geithner still has real problems. >> in terms of mr. bernanke, though, chairman bernanke, how will if indeed the vote count comes in as is suggested, how does it change or does it change the way that the fed does business? because it dash you know, it certainly is not a huge vote of confidence given what we know now. >> so, everything that he does for the next couple of years w
does dodd's departure mean for that stuff. cnbc's chief washington correspondent john harwood sgloins me with aimon jafers of politi politico. financial regulation, what happens now as a result of dodd saying he's not going to run? does this mean he tries to push xt person? >> he is going to push it, and i believe they will get it done with richard shelby of alabama and with barney frank of massachusetts on the house. michelle, i've always thought financial regulation was going to happen. democrats are not going to leave washington and face a tough 2010 election climate without that issue. it removes impediment with republicans working with dodd since working with him doesn't mean that we're helping a vulnerable member of the senate seeking re-election. this is going to get done. it is an indication of how tough it will be in 2010. obama will have a weaker political hand in 2011 than he's got right now. >> the psychological calculous of a lame duck changes a lot, right? doesn't this mean that dodd is far more likely to do what he thinks is right rather than what he thinks gets him ree
york times" up. >>> pressure building on the u.s. to get tough on trade with china. washington's post says in fact we are in a snowballing trade fight. paul krugman with a koum out saying china is not playing fair and u.s. ought to get tougher. joining us to talk trade, commerce secretary gary lock who says he's here to kick off a new $300 million campaign for the census. which mr. secretary, thanks for joining us. we are going to get to the census in a second. our viewers are very interested in the topic of trade with china. as you can imagine. just today "the washington post" highlighting what we noticed for a while here on cnbc. ever since september, more and more trade tensions with china. chicken, steel, paper, salt. are we at risk with a trade war with china? >> no. we at the department of commerce along with the united states trade representatives office have been very vigorous and very vigilant in enforcing our trade axwreemts with china. when we enter into agreement was china to allow chinese goods to come into the united states and american goods to go into china, we do so o
in washington, they're investigating ibm for anti-competitive practices in the booming mainframe market. government obstacle here, to your saying, outlook for ibm? >> the mainframe is a much less important part of ibm than it was historically. in the late '80s the mainframe accounted for 80% to 90% of ibm's profits. mainframe hardware today only 3% of revenues and total mainframe associated profits 30% of the companies. >> drives services, though, doesn't it? you install a big box, hire a bunch of people to do stuff to it for you. >> absolutely. it a key driver. you know, that's in our estimate of the 30% of profits driven from the mainframe. >> toni is ibm a growth or value stock? secondly, should it be a core technology holding in everyone's portfolio? >> it certainly is not a growth stock. when you have a company where we think its longer term growth rate 3%, 4% top line, that's not a growth stock. what it is, is a very stable earnings deliverer. ultimately we think it can continue to do that. the model that we have for ibm is 10%, 12%, eps growth, 2% dividend and the stock strtradi
Search Results 0 to 18 of about 19